National Basketball Association Center Dwight Howard is the most sought after free agent in the NBA. Courted by five teams, most analysts think the bidding is down to the Lakers (his team last year) and the Houston Rockets.
People familiar with the negotiation think the important factors in picking where he will play for perhaps the remainder of his career, includes team mates, the area, the history and culture of the team and, of course, the money. But "the money" includes more than most people think. Taxes may break a tie in his decision process.
LaBron James was the first basketball player to mention the "tax consequences" of picking a team to join. Leaving Cleveland in 2010 he chose to play for the Miami Heat over the New York Knicks, citing taxes as one of his criteria in making the decision.
Mr. Howard, under the NBA's labor agreement, can be offered more by the Lakers than they can by the Rockets. But, the Rockets offer of $88 over four years (the maximum they can offer under the NBA's labor agreement) compares favorably over the possible offers from the Lakers due to approximately $8 million in income tax savings in Texas, which has no income tax, and a lower cost of living in Houston.
California's hostile business environment strikes again.
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